Harnessing the power of social incentives to curb shirking in teams

• Published date: 01 February 2021
• Date: 01 February 2021
• Author: Brian Gunia,Roberto Hernán González,Brice Corgnet
• DOI: http://doi.org/10.1111/jems.12405

J Econ Manage Strat. 2021;30:139–167. wileyonlinelibrary.com/journal/jems © 2020 Wiley Periodicals LLC

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139

Received: 21 November 2019

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Revised: 9 September 2020

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Accepted: 14 September 2020

DOI: 10.1111/jems.12405

ORIGINAL ARTICLE

Harnessing the power of social incentives to curb shirking

in teams

Brice Corgnet

1

|Brian Gunia

2

|Roberto Hernán González

3

1

Emlyon Business School, University of

Lyon, GATE UMR 5824, Ecully, France

2

Carey Business School, Johns Hopkins

University, Baltimore, Maryland, USA

3

Burgundy School of Business, Université

Bourgogne Franche‐Comté, CEREN EA

7477, Dijon, France

Correspondence

Brice Corgnet, Emlyon Business School,

University of Lyon, GATE UMR 5824,

F‐69130 Ecully, France.

Email corgnet@em-lyon.com

Funding information

Ministerio de Economía y Competitividad,

Grant/Award Number: 2016/00122/001;

Ministerio de Ciencia, Innovación y

Universidades, Grant/Award Number:

PGC2018‐093506‐B‐I00

Abstract

We study several solutions to shirking in teams, each of which triggers social

incentives by reshaping the workplace social context. Using an experimental

design, we manipulate social pressure at work by varying the type of workplace

monitoring and the extent to which employees are allowed to engage in social

interaction. This design allows us to assess the effectiveness as well as the

appeal of each solution. Despite similar effectiveness in boosting productivity,

only organizational systems involving social interaction (via chat) were com-

parably appealing to a baseline treatment. This suggests that solutions invol-

ving social interaction are more likely to be effective in the long‐run than

solutions involving monitoring alone.

1|INTRODUCTION

Shirking in teams is a core topic addressed by economic theories of incentives (Holmström, 1982). In the absence of

accurate and verifiable information regarding individual contributions, managers must typically rely on team in-

centives. However, such compensation contracts may provide insufficient incentives because they do not fully reward

individual effort. Because team incentives are used when individual contributions cannot be contracted (see

Holmström, 2017),

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solutions to shirking in teams are thus of a noncontractual nature.

Numerous solutions to shirking issues rely on social incentives (Ashraf & Bandiera, 2018; Bandiera et al., 2010),

which refer to the effect of the social context on an individual's motivation to complete work (see Corgnet et al., 2019;

Tamir & Hughes, 2018). The social context is especially relevant in the case of teamwork because team members often

interact frequently, virtually, or in‐person (see Hamilton et al., 2012; Lazear & Shaw, 2007; Ledford et al., 1995; Miller &

Schuster, 1987; Nyberg et al., 2018).

The current paper aims to compare the effectiveness and acceptability of various social incentive schemes intended

to curb shirking and foster team performance. In other words, we not only study the impact of these schemes on work

effort but also measure workers’willingness to embrace them, thus integrating disparate streams of research on team

shirking and employee satisfaction. A practical goal is to help practitioners identify obstacles in the implementation of

the various systems. We suggest that effective shirking solutions are those that promote work effort and appeal to

workers at the same time.

1.1 |Free riding in teams and social incentives

Social incentives typically rely on either peer pressure or social preferences. Peer pressure can be seen as the me-

chanism by which observing others or being observed by others affects one's own behavior (e.g., Corgnet et al., 2015a;

Falk & Ichino, 2006; Guryan et al., 2009; Mas & Moretti, 2009; see Herbst & Mas, 2015 for a review), whereas social

preferences are defined as a person's inclination to care about others’payoffs in addition to their own (e.g., Bolton &

Ockenfels, 2000; Charness & Rabin, 2002; Fehr & Fischbacher, 2002; Fehr & Schmidt, 1999). Either type of social

incentive can influence individual behavior.

Specifically, social incentives have been shown to help mitigate shirking in teams. Rotemberg (1994) and Dur and

Sol (2010) suggested that the presence of altruistic motives tend to reduce shirking because altruistic workers refrain

from behaviors that would hurt others’welfare. This suggests that triggering prosocial motives might represent an

effective solution to shirking in teams. Growing evidence suggests that prosocial concerns indeed foster cooperation

(e.g., Carpenter & Seki, 2011; Chaudhuri, 2011; Fehr & Fischbacher, 2002). The challenge is to promote such prosocial

concerns in organizations in which shirking is pervasive.

One mechanism that often induces prosocial concerns toward team members is the activation of group identity

(Akerlof & Kranton, 2000,2005). A series of experimental papers have shown that inducing group identity triggers

prosocial and cooperative behavior (e.g., Charness et al., 2007,2014; Goette et al., 2006). These findings corroborate the

results of previous research in social psychology showing that inducing a “minimal group identity”(e.g., grouping

people according to self‐reported preferences on paintings; e.g., Mummendey et al., 1992; Rabbie et al., 1989; Tajfel

et al., 1971,1979; Yamagishi et al., 1999) could promote group cooperation. Dugar and Shahriar (2012) have also shown

that group identity fostered cooperation, whether it was induced using a “minimal group”paradigm or via real, existing

group identities. We thus expect organizational policies and practices that increase or activate group identity to alleviate

shirking in teams. As examples, such practices might include team‐building exercises (e.g., Charness et al., 2014)or

enhanced opportunities for communication and social interaction (e.g., Chen & Li, 2009; Gioia, 2017). Because social

interactions can foster group identity, they might foster altruism among group members and thus facilitate cooperation

(Dur & Sol, 2010).

Continuous social interaction can be seen as a distinctive feature of organizations versus markets, and these social

interactions can foster the internalization of work ethics that proscribe shirking

2

(Ramalingam & Rauh, 2010). In particular,

we focus on the impact of granting workers’access to a peer chat platform as a mechanism fostering social interaction

(Chen & Li, 2009;Dawes,1991) and thus boosting team production. Communication has been found to sharply increase

cooperation in social dilemmas, especially in larger groups (see Balliet, 2010; Sally, 1995 for reviews). Similarly, a vast literature

on public goods games (see Ledyard et al., 1995; Zelmer, 2003 for an overview) has shown that the introduction of com-

munication can increase cooperation (see, e.g., Bochet et al., 2006;Bochet&Putterman,2009;Bohnet&Frey,1999;Davis&

Holt, 1993;Ostrometal.,1994;Ostrom&Walker,1991;Ostrometal.,1992; Palfrey & Rosenthal, 1991 ; Sally, 1995).

Additionally, communication fosters group identity and commitment (Kerr & Kaufman‐Gilliland, 1994)aswellasthe

development of social norms (Bicchieri, 2002). Our first hypothesis is stated as follows and is formally derived in Appendix A

following the models of Rotemberg (1994) and Dur and Sol (2010).

Hypothesis 1. (Chat). Teams endowed with the ability to engage in peer chat will exhibit higher production levels

and less shirking than teams not endowed with peer chat.

Another mechanism that can foster prosocial behavior in teams is peer pressure.

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Models of peer pressure often

incorporate feelings of guilt or shame that emerge when an individual exerts less effort than team members (e.g.,

Barron & Gjerde, 1997; Kandel & Lazear, 1992). These feelings make shirking psychologically costly. Indeed, accu-

mulating evidence shows that being watched by one's coworkers effectively deters shirking in teams by increasing the

amount of shame an individual experience. For example, Mas and Moretti (2009) reported positive peer effects on the

number of items scanned by supermarket cashiers. These positive effects emerged when cashiers were observed by

highly productive workers, but not comparably productive workers, suggesting that the feelings of shame that emerge

when others deem an individual a lower producer are especially relevant in understanding peer effects. Mas and

Moretti (2009) refer to mechanisms based on shameful feelings to explain social pressure. They emphasize that the

effectiveness of social pressure in reducing shirking hinges upon people's desire to be seen as prosocial, and thus their

susceptibility to shame. This mechanism has been modeled by Kandel and Lazear (1992) as well as Bénabou and Tirole

(2006) and further validated by the experimental tests in Corgnet et al. (2015a,2019).

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